Unemployment benefits create jobs

Exit polls tell us that, above all else, the midterm elections were about jobs.

Voters want Congress to create jobs and end high unemployment. A good opportunity is at hand. On Nov. 30, emergency unemployment benefits for those who have exhausted their normal benefits are set to expire. Congress must decide whether to extend them again for the millions of workers who are still without a job more than 26 weeks after they first became unemployed.

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Enormous economic benefits, including job creation, are likely to develop if we continue providing emergency unemployment compensation. But there is also a powerful moral case to be made — the jobless workers have no other source of income and millions might fall into deep poverty without it.

Yet two arguments against another extension have been gaining traction, even among Democrats. First is that unemployment compensation discourages people from seeking work. In other words, workers treat it like a paid vacation. If we didn’t have so many weeks of benefits, this argument goes, then the unemployment rate would be far lower.

In ordinary times, this might be worth examining. But when the economy has lost 8 million jobs, it makes no sense.

Yes, unemployment compensation makes workers less desperate to find a job. But it doesn’t change the number of available jobs. Remember, there is only about one vacant job for every five unemployed workers — or about 3 million job openings for the economy’s almost 15 million jobless workers. Plus an additional 9 million people in part-time jobs, who are looking for full-time work.

This means that, no matter how hard they try, only one out of five could possibly find a job. Four won’t — no matter how hard they try and no matter how desperate they are.

So ending long-term unemployment compensation means that millions of unemployed workers are likely to be cut off from their only means of support and thrown into poverty. It won’t create a single job. It only punishes workers, and the families of workers, jobless through no fault of their own.

Economists know this. But it is also common sense. Since our economy lost 8 million jobs, there aren’t enough jobs to go around. Ending unemployment compensation won’t create them.